Just remember- do you often feel extravagant because you are tempted by the sale and buy things you don’t need? Or you still like to be confused, whether you want it or need it? Check out these 4 ways to differentiate wants and needs!

1. Ask yourself, is it a want or a need?

When you’re faced with a choice to buy something, why not ask yourself if it’s actually a want or a need?

Ask yourself this;

  • Do you need that thing right now?
  • What if it’s not being bought right now?

Well, try repeating those questions again every time you decide to buy something.

2. Understand basic human needs

  • What are human needs? Go back to basic economics. Human needs are divided into primary, secondary, and tertiary.
  • Primary needs are the basic needs that must be met, such as clothes, food, houses, and work.
  • Secondary needs are needs once primary needs are met, for example, education and recreation.
  • While tertiary needs are needs after primary and secondary needs are met, such as motors, cars, computers, etc.
  • If you already understand the concept between these needs, you should know that it will be easier to distinguish between wants and needs.

3. Take Note of Every Expense

  • Things look simple but essential. Take note of every expense you make. It can range from monthly fixed needs to small expenses such as parking or providing online transportation tips that you use.
  • Doing so can help you keep an eye on which parts of your personal finances come out the most, so by the end of the month, you know what posts spend the most of your money. So, where’s the part that makes your personal finances too much.

4. Making Tables of Want vs. Need.

  • To differentiate wants and needs, create a comparison table of¬†wants vs. needs.
  • How do you fill it? When you’re confused about what stuff goes into which table, ask yourself, can you live without it?
  • Repeat the question whenever you want to differentiate between wants and needs when managing personal finances.¬†Hopefully, the tips are helpful to you, Sandy’s Friend!